Philanthropy and the State: Divisions of Labor and Authority

Editors’ Note:For the last weeks, HistPhil has hosted a forum on the Green Revolution and we thank its contributors: Gary Toenniessen, Marci Baranski, Helen Anne Curry, Gilbert Levine, Ruth Levine, Tore Olsson, and Jonathan Harwood. With the below piece, Emma Saunders-Hastings launches the new forum on philanthropy & the state. She argues that the distribution of public authority (rather than division of labor) should guide our analysis of the appropriate relationship between philanthropy and the state. As always, we welcome readers to write in with ideas for contributions (or simply to comment) on this and previous forums.

An intuitive way of thinking about the relationship between philanthropy and the state is in terms of a division of labor. For any social good or service, we can ask whether it ought to be supplied by the state (exclusively or to some level) or by philanthropists and voluntary associations (as well or instead). Answering this question involves considerations of both justice and efficiency: we can make moral claims about which actors have duties and legitimacy to act in what sectors, as well as empirical claims about who will do a better job of delivering a particular good or service.

Negative attitudes toward the state, as well as a positive valuation of philanthropy, can lead people to favor an extensive public role for private charity. But even people who favor large cuts to public spending, and who would prefer philanthropic to state provision of most services, will want to draw the line somewhere. At a minimum, most people think that states must maintain a monopoly over the legitimate use of force. (Imagine the reaction—even among the Bill and Melinda Gates Foundation’s greatest admirers—if the Foundation announced plans to fund a private army for humanitarian interventions.) But the worry about philanthropists taking over state responsibilities can arise in less dramatic sectors, such as education policy. When Diane Ravitch refers to the Gates Foundation’s funding and promotion of the Common Core State Standards initiative as “an educational coup,” she implies that the Foundation has usurped the responsibilities of public, democratically-elected officials.

But the “division of labor” perspective, while intuitive, can also be misleading. There is a risk that questions about the sectors where philanthropy is more or less appropriate will obscure questions about the terms on which donations are offered and accepted. In cases like secondary school policy, what critics are most worried about is not philanthropic funding per se but rather philanthropic influence. Whether permitting philanthropic funding in any given policy area leads to unlimited philanthropy influence over that policy area depends on both the scale of philanthropic contributions relative to the sector as a whole and on the rules of engagement laid out by states.

To see this, consider an example of a donation that was uncontroversial relative to its novelty. As with military spending, most of us assume that foreign policy and diplomacy ought to be the responsibility of states rather than of philanthropists. Yet in December 2000, having already pledged $1 billion of his fortune to fund UN international programs, Ted Turner agreed to pay an additional $35 million to make up the shortfall in the US’s UN dues. On its face, this looks like a case of a philanthropist taking over state responsibilities. At the time, some observers expressed disappointment with the US government’s abdication of its international responsibilities. But few people argued that Turner had overstepped the bounds of acceptable philanthropic behavior or that the donation should not have been permitted. Why? Because, I think, there was no serious concern that Turner’s donation was buying him undue influence.

Foreign policy being contracted out to a private philanthropist would indeed be alarming. But there was very little sense, in the Turner case, that this was what had occurred. Turner’s donation, though generous, was small compared with both the UN’s overall budget and the US’s capacity to pay: it is unlikely that $35 million would be enough to give Turner outsize influence over US foreign policy or UN programming. In any case, Turner did not impose conditions on the gift that would bind either his own government or the UN. There were also legal limitations on philanthropic influence: indeed, Turner’s funds had to be channeled through the US state department, since the UN charter prohibits it from receiving donations directly from individuals. Unlike donations to secondary education, then, the Turner gift did not seem significantly to alter the distribution of influence over the relevant policy actors, or to reorient accountability from the public sector to private donors.

This example suggests that we can only get so far by asking whether a particular policy area is an appropriate venue for philanthropic funding and service-delivery. Within the sectors where it permits philanthropic involvement, a state may distribute authority in different ways and accord more or less power to donors. This is not only a matter of what kinds of authority the state reserves for itself, but also of how it distributes authority between the different actors involved in philanthropic transactions.

US law empowers philanthropists by privileging the wishes of donors over those of recipient organizations or the broader public. Large donations often come with conditions on how the gift may be used, and these conditions are very difficult for recipient organizations to overturn, even long after the donor’s death. One may or may not see this as a problem: many people will defend deference to donor intent and argue that the donor’s right to specify uses for her property trumps considerations of organizational flexibility or social utility. But we should recognize that the ability of donors to specify how their property will be used, and to have those wishes defended by courts and state attorneys general, are not part of a natural property right. Rather, these forms of donor authority are the creation of laws that give special protections and privileges to charitable intent: donors who leave their property to ordinary heirs do not enjoy such far-reaching powers to set limits on how property is to be used.

In thinking about the relationship between philanthropy and the state, we should distinguish the division of labor from the distribution of authority. We should resist the false choice between, on the one hand, blocking philanthropic donations in some sectors and, on the other hand, according unlimited public influence to wealthy donors. Rather, we should seek ways to encourage and celebrate private contributions of public benefits, while at the same time distributing public influence and authority more equitably between donors, recipients, and the broader democratic public.

-Emma Saunders-Hastings

Emma Saunders-Hastings is a Harper Fellow in the Society of Fellows and Collegiate Assistant Professor in the Social Sciences Division at the University of Chicago. She holds a PhD in political theory from Harvard University and is completing a book manuscript on philanthropy, inequality, and paternalism.